Shortage of new Intel laptop chips may mean laptop delays

Given the eye-popping earnings that tech companies have reported for the first quarter of this year, it seems that consumer wallets are open once again. This surge in buying has prompted the mother of all inventory restockings, as OEMs like Acer gobble up parts and build up a supply of systems to meet the increase in demand.

Intel, it seems, has been caught flat-footed by the strength of the restocking surge, and is unable to meet the demand for the supply of 32nm mobile chips. The chipmaker is seeing shortages of its Arrandale chips, and IDG reports that Arrandale prices are being bid up by as much as 20 percent on the open market as a result.

Not only are prices for Arrandale jumping, but analysts expect that many OEMs will have to delay the launch of their newer laptop lines because they can't get enough CPUs to go to market. If this actually turns out to be the case, NVIDIA may see some collateral damage, because this would mean a delay in the rollout of Optimus systems.

On the recent Intel earnings call, CEO Paul Otellini admitted that the company is "slightly behind" in meeting the demand for 32nm parts, but said the company is ramping up production and anticipates that the pressure should ease in the second quarter.

17 Reader Comments

This explains why, months after the release of Arrandale, most laptops are still shipping with core2 chips. Lenovo is the only manufacturer that's updated most of its product lines... when I was laptop shopping two weeks ago, even Dell's Latitudes were still core2-based.

Not that surprising. Intel's been saying that supply was going to be tight on 32nm parts since they launched; which is why they've kept core2 parts alive in parallel on their roadmaps for a while and aren't offering 32nm LGA1366 quads.

Where the economy really is having the biggest impact is the canceling of the 45nm mobile/LGA1156 chips that were supposed to come out last summer due to the core2 glut. Had those chips been launched the shortage of 32nm siblings wouldn't matter as much even if it happened at all because 32 v 45nm nehalem is a minor gap relative to nehalem vs core2 chips.

The 45nmn chips in mobile form (Clarksfield) are also very very hot compared to the Arrandale parts. Interestingly enough, while you would expect the 4 core Clarksfield to outperform the dual core 32nm Arrandale, that isn't always the case. Arrandale does still have the memory bandwidth 'concern' but in benchmarks with both 3d applications & audio applications Arrandale is much MUCH more competitive than it's desktop sibling which has all the higher multipliers, turbo and so on disabled.

Didn't MS say in their earnings call that replacement cycles are lengthening, and that this was the reason for the falling revenue? Intel seems to be saying the opposite.

A short term tightness in supply of a subset a of relatively new CPUs may not be indicative for the overall market.

To borrow an analogy, just because it snowed early this year (weather) does not mean the planet isn't getting warmer (climate).

Also, when you consider that a lot of companies basically put their cycle on hold during the downturn, it is not surprising if we have at least some recovery surge, even with stretched out replacement cycles. Throw in consumers who had been afraid to buy, but seem to be finally getting over their fears, and you have another reason for increased sales.

I don't understand how the CPU market works. Intel seems to have a severely dominant position, with many guaranteed partners like Apple, Lenovo, Dell, etc. Having produced too few, prices jump by 20% on the open market according to this article. Yet, the processor market seems innovative innovative, prices are kept low and supplies are usually fine (I chalk this supply problem up to lowered expectations due to the recession).

Why is that? Why don't they try to screw us over like every other dominant company? Am I missing something? (Not that I want them to, just wondering aloud)

I don't understand how the CPU market works. Intel seems to have a severely dominant position, with many guaranteed partners like Apple, Lenovo, Dell, etc. Having produced too few, prices jump by 20% on the open market according to this article. Yet, the processor market seems innovative innovative, prices are kept low and supplies are usually fine (I chalk this supply problem up to lowered expectations due to the recession).

Why is that? Why don't they try to screw us over like every other dominant company? Am I missing something? (Not that I want them to, just wondering aloud)

AMD is not exactly stupid.

Intel knows if they slip up AMD gets the open door to pass them up on the performance front.

I don't understand how the CPU market works. Intel seems to have a severely dominant position, with many guaranteed partners like Apple, Lenovo, Dell, etc. Having produced too few, prices jump by 20% on the open market according to this article. Yet, the processor market seems innovative innovative, prices are kept low and supplies are usually fine (I chalk this supply problem up to lowered expectations due to the recession).

Why is that? Why don't they try to screw us over like every other dominant company? Am I missing something? (Not that I want them to, just wondering aloud)

AMD is not exactly stupid.

Intel knows if they slip up AMD gets the open door to pass them up on the performance front.

Agreed, it's happened before with Pentium 4/Athlon 64. However, I doubt AMD would be able to catch up to mobile Intel CPUs anytime soon, even if Intel *did* slip up.

Honestly, the Lynnfield chips are 20cents in terms of manufacturing costs. The rest covers the costs of the overall corporation and investor returns, and the overall 'innovative' aspects have been mapped out for years at least in a theoretical sense (knowing what limits would become a concern at what point.)

Case in point is the removal of the northside bus (MCH), to many people it seemed like Intel was late to the party, but they knew that they could ride the 'old' technology by hitting process shrinks sooner for more complex dies (more cache and circuits for pipeline prediction etc) for as long as possible and debut the technology later than AMD but still remain competitive. Why would they do this? Imo it allows them to trickle things out slower and reap higher yields. They also only publish things out to a certain date, being less open about their plans 5 years from now than AMD but far more so than say Apple (in terms of overall "corporate culture" not in terms of being the same market...)

AMD on the other hand has a tendency to declare future generations years before they surface and show their product map as if it's some grand scheme that Intel is clueless about. Since the Athlon era on they at least have had the performance to make good on the promises (I had several of their previous era cpu's) and so win a lot of fanboy points for this. They also treat their customers a bit better in terms of not making unexpected voltage requirement changes or changing sockets like most people change their socks, but I digress.

I don't understand how the CPU market works. Intel seems to have a severely dominant position, with many guaranteed partners like Apple, Lenovo, Dell, etc. Having produced too few, prices jump by 20% on the open market according to this article. Yet, the processor market seems innovative innovative, prices are kept low and supplies are usually fine (I chalk this supply problem up to lowered expectations due to the recession).

Why is that? Why don't they try to screw us over like every other dominant company? Am I missing something? (Not that I want them to, just wondering aloud)

Prices for the Core iX parts may have jumped, but the Core 2X parts haven't. So they are competing with themselves. If you can't afford a Core i7, you can always buy a Core 2 Duo.

I'm sorry... did they say 35nm?! Okay, guys, seriously... this stuff is getting out of hand. I thought 45nm was going to be the lower limit... hoping, rather. I mean, we're already playing with raw atoms here it seems... it seems silly to exert so much energy cramming an over-complicated design into an ever smaller package. Almost like we're to the point of severely pissing off the atomic powers-that-be...

Still gonna buy one, though. Just hold onto 35nm for a while. Jeez. Stop getting ever smaller. Just hold onto this for a while. OK, Intel? Focus on what you've got.